The Fast-Moving Consumer Goods industry, or FMCG, is basically products that are quickly sold usually due to their relatively low price. A good example for your understanding would be Nestle. They parent so many popular brands you can very easily spot in any grocery store. Overall, it’s a highly competitive industry and brands are constantly vying for consumers’ attention and loyalty.
As we all know, we’ve entered a digital era whereby marketing or branding strategies have evolved and traditional marketing isn’t as effective as it used to be. So, over the past few years, a particular strategy has become a norm as one of the most effective marketing strategies there is. If you take a look at our other blog about understanding Gen Zs as consumers, you can see how they take up the largest percentage of our entire population and hold the most spending power. In that blog, we also mentioned how Gen Zs are very open to expressing their opinions and reviewing products and they value authenticity in a brand. Thus, User-Generated Content, or UGC, has become one of the most effective marketing strategies, especially for the FMCG industry. FMCG brands are now reshaping how they interact with consumers to influence purchasing decisions and redefine their brand-consumer relationships.
Understanding User-Generated Content (UGC)
Simply put, any content that highlights a product by a consumer is considered UGC. Be it blogs, images, videos, reviews or testimonials shared onto social media or other channels. Any content made by a consumer, rather than the brand itself, highlighting a certain product is UGC. It’s like digital word-of-mouth and that has gained a lot of traction thanks to the constant rise of social media platforms. The reasoning behind the effectiveness of this strategy lies within the authenticity of it all. Consumers are more likely to trust a product or brand that has been reviewed by influencers or their peers, making UGC a very powerful tool.
Why Should FMCG Brands Utilise UGC?
Utilising UGC may bring many benefits to a brand. Those include:
1. Increases Brand Awareness and Engagement: Imagine that a consumer publishes a video about a certain product by a particular brand. They say that the product is so good that it has become their favourite product. This influences their peers that the product is so good that they too have to try. This cycle could go on and on until they inadvertently become brand advocates. Thus, this cycle alone can already broaden a brand’s reach to a larger audience. It helps a lot if the product or brand is actually beneficial, useful or genuinely favoured by a lot of consumers since the UGC will ultimately be positive.
2. Improves Customer Trust and Loyalty: First comes trust, then comes loyalty. Brands can gain that trust by being genuine and authentic with the portrayal of a product’s value or efficacy, avoiding false advertising or overpromising. Overpromising but under-delivering can ruin your brand-consumer relationship and the trust is gone. But once a brand gains trust, this eases their way to earn a consumer’s loyalty. Through UGC, especially honest ones, consumers get to see the true value of a product. Plus, consumers tend to trust the opinions of their peers rather than the brand itself or scripted advertisements.
3. Increases Sales and Leads: UGC is such a powerful tool to drive conversions. A good example of this is from a social media platform called TikTok. It’s a diverse platform with many functions including the option to operate online shops. With this function, a lot of retailers have effectively boosted their sales through UGC and letting their advocates sell while livestreaming. Livestreaming especially helps when consumers get to see the product in real-time and instantly purchase it. On top of that, UGC by influential consumers play a huge role in driving sales.
4. Valuable Data-Driven Consumer Behaviour Insights: Through UGC, brands have a first-hand look into consumer behaviour, preferences and current trends. After analysing, this golden data can be used to then tailor their strategies accordingly.
How Can Brands Encourage UGC?
1. Running Contests and Giveaways: It’s been known that giveaways or contests held by brands attract quite a large audience, especially if the reward is worth it. One mechanism that consumers are more likely willing to do is sharing a photo or video of them with the products of that brand. As an example, let’s take a look at one of the social media giveaways that we have helped create for a brand called Aussie Beef & Lamb. The campaign involved consumers sharing images or videos of them spotting the brand’s products in grocery stores. This resulted in a lot of UGC that helped increase the brand’s awareness.
2. Offering Incentives: Similar to holding giveaways or contests, consumers are more encouraged to share UGC when they’re incentivised. Offer vouchers, discounts, referral codes or even acknowledgement or recognition to motivate your targeted consumers. This method taps into their desire for rewards or deals that benefit them and boosts engagement at the same time.
3. Creating Branded Hashtags: Creating branded hashtags will help strengthen UGC’s efficacy. When a unique hashtag is created for specific brands or products, it makes the UGC easily discoverable. This also encourages other consumers to use those hashtags when sharing content. In turn, brands get to track and share UGCs effectively and this encourages more sharing among consumers.
4. Strategically Crafting Marketing Campaigns: Consumers tend to enjoy sharing their experiences or contribute their stories with a product or brand. Thus, any campaign that invites consumers to do so will create a surge in UGC. Especially when it is phrased as a challenge because everybody loves a challenge and this will spark a wave of UGC.
While we have you here, why don’t you take a look at our blog about “Short vs. Long Videos: Which one is better for social media?”.
Utilising UGC Effectively
1. Curate UGC: As much as UGC thrives on authenticity, curating some of the content such as testimonials help maintain quality and relevance. By ensuring that the content is not too scripted and the genuineness is maintained, a brand can showcase great UGC to provide a comprehensive view of its products.
2. Promote UGC: When UGC is shared, brands should make it a point to actively share and promote those content on their social media platforms or other channels. Doing this can give the users a sense of acknowledgement and gratitude. This basically shows consumers that brands appreciate their efforts and this will encourage more UGC.
3. Create New Marketing Materials: One thing that brands don’t realise is that UGC can also help reduce content creation costs. This is because brands can create new marketing materials using the UGC as advertisements, promotional videos and more. On top of cutting costs, this also shows authenticity and how the brand appreciates its users.
4. Measuring Impact: Engagement rates, website traffic, conversions and other metrics from the impact of UGC should be measured frequently by brands. Aside from helping to tailor better marketing strategies, this helps brands pinpoint problem areas and further refine their strategies.
Let’s Wrap It Up
FMCG is a rapidly growing industry and UGC plays a huge role in that growth. Brands have to learn, better now than later, that UGC is highly beneficial and it can very effectively help the brand grow and increase sales. Embracing UGC helps strengthen the brand-consumer bond, ultimately allowing them to stay ahead of the competition. Anyway, if your brand is having trouble with wrapping your head around this, our team of experts at CR8 Consultancy are always ready to help. All you need to do is give us a call or shoot us an email here.